Operation and Communication Plan of Aer Lingus - Essay Example

MARKETING & COMMUNICATION PLAN: AER LINGUS INTRODUCTION Travelling to Ireland has never been cheaper. Be it travelling from North America across the transatlantic route or from any destination in Europe, the price disparity between destinations in Ireland and neighboring England is bewildering and more often than not the so called ‘budget’ airlines that promote a no frills offer have often left customer paying more than what they would have spent on a regular flight. Besides, all this is without the regular refreshments on offer. Aer Lingus is Ireland’s National airline and the promotional mix of the company is the topic of discussion under the current paper. The most prominent form of advertising strategy currently followed by Aer Lingus relies extensively on the Internet wherein the primary emphasis is on flights to and from Ireland. The company has grown from a small carrier to Ireland’s principal carrier by thriving on the idea of the ‘no-frills airline’ concept, a business model that has been adopted by several European airlines such as Ryan air and Easyjet. Additionally, Aer Lingus offers inter - continental flights to and from the United States (Bernard Share, 1986). CURRENT MARKETING PLAN Most of Aer Lingus’ branding is based on web based advertising wherein it has adopted a bidirectional approach. For customer hailing from within Ireland, the company has used the local print and mass media through newspapers and television in order to keep the brand name afresh among the people. Secondly, in order to generate business from overseas customer flying into Ireland, the airline has established partnerships with several airline booking websites such as www.momondo.com, www.orbitz.com and www.skyscanner.net. The airline is partly owned by another famous low cost carrier – Ryanair. As such, whenever the travel itinerary is associated with destinations in Ireland, the top search results tend to predominantly consist of flights operated by Aer Lingus (Gerry Johnson, Kevan Scholes, Richard Whittington, 2008). The company promotes cheap flight offers predominantly through newspapers such as the Irish Times and the Irish Independent at regular intervals. The major focus of Aer Lingus is to enhance profitability through the enhancement of Customer loyalty. This can only be achieved through the implementation of an efficient and well devised Customer Relationship Management (CRM) Strategy. In order to do so, the company has to foster customer and organizational behavior. This has been initiates by Aer Lingus through its corporate website that facilitates booking of tickets apart from displaying all services and offers from the airline. However, the website has not been active in promoting itself through online advertisements in the form of banners across third party websites, which is considered to be one of the main reasons for its relative anonymity amongst most travelers (in comparison to the brand value of other carriers) (Thomas N. Garavan, Barra O. Cinneide, 1996). DEFICIENCIES IN THE CURRENT STRATEGY In the present day, it is professed that the success of a low cost carrier where most of the business is done online depends on three major factors. While the first aspect of the last cost between destinations has already been discussed, the factor of number of visitors to the airline’s website and affiliate sites also exercised a significant impact on the revenue generated. The last and perhaps an equally important criterion for the success of the promotion initiative lies in the aesthetic appeal of the company’s website. the design of a website should be efficient enough that it should allow a novice visitor to understand the prime purpose of the website at the first glance. However, the website of Aer Lingus, www.aerlingus.com seldom bears a remote picture resembling an aircraft (Rigas Doganis, 2006). Customers have expressed reservations with regards to low cost travel and have expressed reservations on the hefty feed that are charged with services related to changes in flight schedules, particulars of passengers etc. where the airline usually charges prices almost equal to or in excess of the cost of the ticket on most routes (Sally Dibb, Lyndon Simkin, 2001). Besides, customers wishing to have the possibility to change their flights subsequent to booking their flights are required to pay as much as 3 times the cost of a regular low cost ticket (Charles T. Horngren, Alnoor Bhimani, 2008). All these issues are seen by customers as ploys on the part of the airline to charge customers despite the low-cost drumbeat. The company could enhance its existing CRM strategy by increasing attention towards the product and customer-centricity. Since these two dimensions of CRM are mutually exclusive, the company must clearly identify the discrete activities amongst these two classes, which will provide a gradual evolution from the product towards customer centricity. The airline is additionally making a few fundamental mistakes that need serious overlook. The different elements of the promotional strategy are the usual market tactics that are being used by low-cost airlines today and even though the ‘no frills’ concept initially succeeded in boosting airline traffic, the situation has reached its saturation levels with many airlines virtually ceasing to exist owing to decline in revenues and market capitalization (Rigas Doganis, 2004). As such, there is a primary need for ‘Aer Lingus’ to refurbish its marketing and promotion strategy in order to gain consolidate its market share apart from making further inroads into bigger customer shares (Jill Dyché , 2001). By investing in new technologies, the company may be in an advanced and well placed position to lower costs further thereby binding existing and newer customers, which would substantiate the CRM policy adopted by the airline (Wolfgang J. Koschnick, 1983). THE NEW PROMOTIONAL MIX Aer Lingus new strategy must also be made to follow along the lines of the AIDA Model wherein the focus, as mentioned earlier, should move from profitability to increasing the awareness of the customer. AIDA stands for Attention, Interest, Desire, Action (Rajiv Grover, Marco Vriens, 1997). The company can improve the relationship with the customer by undertaking a vigorous and adequate campaign aimed at highlighting the benefits and advantages that Aer Lingus would be able to provide. The company could gain more in terms of expenses by using recycled material for serving foods and beverages that are usually cheaper. This would pave the way for the company to be recognized as an airline that is able to provide full fledged services at the lowest cost. The new promotional mix is part of the popular approach known as the ‘Integrated Marketing Communications (IMC)’ approach, that popularizes the use of online and offline marketing channels (Geoff Lancaster, Frank Withey, 2006). The focus needs to shift to ‘Relationship marketing’, where the emphasis is on establishing a personal and everlasting bond with the customer. As per the self-perception theory, the airline must ensure that the expectation of the user needs to be upheld by the provision of the best services at the least cost. The judgments of the customer must not be allowed to be distorted against their expectations as any such occurrence would become too costly for the company eventually resulting in a loss of customer base. The major requirement in this context is that the airline has to understand the diverse construct systems among customers as such analysis using mathematical analysis or otherwise would make the behavioral trends among customers predictable thereby helping Aer Lingus take help from the self judgment theory. The company has to begin building a unified brand by through the use of the Internet instead of relying on advertising lucrative deals through newspapers and other mass media as readers generally discard such promotional material. This strategy gains influence from the theory of classical conditioning, which is an adaptive learning process that develops through the associations between an external and the natural stimuli. One of the simplest approaches here would be to devise a new eye catching logo that can over time become synonymous among customers as the best low cost airline (Isidore Gormezano, William Frederick Prokasy, Richard F. Thompson, 1987). It is also advised for the company to act ahead of time with regards to its seasonal offers. Rather than begin to promote offers just before the start of the season, it is advisable that such campaigns begin at least a year in advance so that visitors have ample time to consider a holiday that aligns itself with the offered flights and travel packages thereby helping brining even the undecided ones into the fold. This strategy will also work a long way in projecting the message in a consistent manner thereby helping it seem more credible and not as spam. The website of Aer Lingus needs to revamped and designed with an aesthetic and corporate outlook thereby enabling customers to enhance its customer value. Content within the site has to be aligned and structured properly such that users have the easiest of experience in navigating through the website and booking tickets. Care should be taken while redesigning the corporate site as any shortcoming will result in confusion, frustration and anxiety on the part of the customer. Such steps are therefore crucial for the consolidation of the business and expansion into a wider customer base that will fulfill the future aspiration of the company in the long run. CONCLUSION As can be seen in the preceding paragraphs, the new marketing and communication plan for Aer Lingus emphasizes the importance of the Internet in the future as more and more services are relying heavily on it to streamline their processes, improve the quality of services offered and be able to offer a better service at reduced costs. Customers are attracted to places where the maximum services are offered at the least or affordable costs. As such, the airline could make use of the strategies that have been proposed as part of the classical conditioning, CRM and AIDA models that will help it to obtain significant strategic gains in the future, thereby helping it overcome existing difficulties and create a dedicated customer base. As part of the strategy to implement the above measures, it is deemed necessary to elaborate a few of the concepts mentioned above. Appendix A (AIDA Model) AIDA is an acronym that stands for Attention, Interest, Desire and Action. The application of the AIDA Model would be extremely crucial in the present context as it would enable provide a number of advantages. As the model suggests, the first and the foremost criteria for generating business is to invoke the interest of the customer. This attention is only possible when the customer is exposed to a certain set of ideas that expose the inherent benefits that would suit the tastes and requirements of the customer, which in the present case would be issues such as best quality service, increased connectivity between places, lesser check-in and travel times apart from the most important factor of low cost without any hidden costs. All such factors can be used to generate a desire that would pave the way for appropriate action on the part of the customer. Appendix B (Self-Perception Theory) However, a question now arises when devising the new strategy on how to get the idea across to the customer. The behavior of the customer and the factors that lead and determine the course of action that they would take is a very complex psychological process that can be related to a handful of theories. Customers are usually driven by a sense of self perception wherein everyone aspires to enjoy the best possible services irrespective of their ability to spend. This is true even when the customer opts for an affordable alternative, but their attention over the better product remains intact. In doing so, individuals seldom access their internal states and their approach and preferences change over time in response to the changing environment. In the current case, the customer has been exposed to airlines for a long time and is aware of the luxurious services that are offered in say, the first class or executive class. As such, even when they prefer low cost travel, the lack of any additional services tends to put them away to a little extent and as such, the new strategy can take these higher expectations of people into consideration. people look at the various services that are offered by several standard airlines (first class perhaps) and even though they do not wish to pay for it, they definitely intend to enjoy similar services, or at least a part of it. Appendix C (Social Judgment Theory) Another theory that could be brought to use when suggesting the new strategy would be the social judgment approach, which means measuring the superset of all customer behaviors that can be gauged in a feasible sense. for example, some travelers like more leg space, some travelers like to sit near the window, some of them prefer lesser waiting time. As such, it is advised to gauge all such factors, which can be done through mathematical methods such as surveys etc. such an approach can particularly be applied to longer trans-Atlantic routes where overlapping solutions between factors such as occupancy rates and leg space could be devised in an effort to target both criteria. Appendix D (Integrated Marketing Communications) Using the solutions provided through these theories, it now becomes important to determine the method in which all the benefits of the new strategy would be conveyed to customers. One of the most important and popular solutions in this context is Integrated Marketing Communications (IMC) that would ensure that all brand contacts with a potential customer would remain within the boundaries of relevancy and consistency over time. As such, care should be taken while promoting that there is no difference between the message that reaches the customer during promotion and what the customer eventually gets and has to pay for. This is only possible if mass media is neglected and focus is instead given on getting the message across through a niche medium, which in this case would call for a vigorous promotion through the Internet through several steps that would include, change of the company logo and the corporate website, renewed brand building, partnerships with sister travel websites as well as constant promotional mails to the customer. In the case of emailing the customer, care should be taken to the design and timeliness of sending mails such that the customer would be in the best position to differentiate between genuine promotion and adware. Appendix E (CRM Strategy) The Theories summed up above have provided insights into various dimensions that formulate the approach of Air Lingus towards the customer. However, in the midst of this strategy, it is also important to determine a well defined mechanism for maintaining and managing the relationship with the customer. As has been mentioned before, the CRM strategy for Aer Lingus has to be both product and customer centric. In this sense, since the communication channels will rely extensively on the internet, the new approach can be termed as e-CRM. What differentiates this new approach is the capability of the company in being able to address the priorities and preferences of the customer within a hyper-competitive market, which means much more than barely understanding the customers than fellow competitors. Firstly, the new strategy should implement customer knowledge at every level of the airline ranging from the top management to the customers who come in direct contact with the customers. The policies that govern the new CRM strategy should still be uniform throughout. Apart from the automation of the various processes such as sales, marketing and customer service, the efficiency and the quality of these processes must be constantly monitored and improved upon constantly. This can only be achieved if there are timely and regular interactions with the customer during different phases of travel raging from booking tickets, check in to in-flight service and landing. Such approaches will not only help the company provide better service, but will additionally help the identification of areas and processes where costs can be minimized and services improved. The new approach must also look towards gaining back defected customers that can improve the revenues by as much as 1-2 %. Aer Lingus needs to unite people and technology in order to ensure appreciable performance. The data obtained through customer interaction must be analyzed proactively at all levels in order to create a sustainable relationship with every customer. This is popularly known as the customer-focused, technology-driven approach. Staff need to be motivated and reaffirmed that their success and the success of the company rests on the quality of service delivered to customers, which calls for relevant staff training in this area. Finally, success and quality must be measurable and investment must be made into enhancing customer oriented initiatives. Employees need to be motivated through appraisal systems that take the quality of customer service into due consideration. All these measures will work a long way in making e-CRM a well placed and justified strategy when implemented. REFERENCES 1. Bernard Share, 1986. Flight of the Iolar: The Aer Lingus Experience, 1936-1986. New York: McMillan. 2. Charles T. Horngren, Alnoor Bhimani, 2008. Management and Cost Accounting. New York: Pearson. 3. Geoff Lancaster, Frank Withey, 2006. Marketing Fundamentals: 2006-2007. London: Butterworth-Heinemann. 4. Gerry Johnson, Kevan Scholes, Richard Whittington, 2008. Exploring Corporate Strategy: Text & Cases. New York: Pearson. 5. Isidore Gormezano, William Frederick Prokasy, Richard F. Thompson, 1987. Classical Conditioning. London: Lawrence Erlbaum Associates. 6. Jeffrey Peel, 2002. CRM: Redefining Customer Relationship Management. New York: Digital. 7. Jill Dyché, 2001. The CRM Handbook: A Business Guide to Customer Relationship Management. New York: Addison-Wesley. 8. Rajiv Grover, Marco Vriens, 1997. The Handbook of Marketing Research: Uses, Misuses, and Future Advances. London: SAGE. 9. Rigas Doganis, 2006. The Airline Business. London: Routledge. 10. Thomas N. Garavan, Barra O. Cinneide, 1996. Cases in Irish Business Strategy and Policy. London: Cengage Learning. 11. Wolfgang J. Koschnick, 1983. Standard Dictionary of Advertising, Mass Media and Marketing/Standard. Berlin: Walter de Gruyter. 12. Michael Solomon, 2006. Consumer Behavior: A European Perspective. New York: Pearson. 13. Sally Dibb, Lyndon Simkin (2001), The Marketing Casebook: Cases and Concepts. New York: Cengage. 14. Rigas Doganis (2004), Flying Off Course: The Economics of International Airlines. London: Routledge. Read More